First On-Time Jobs Report Since Government Shutdown Shows Data Improvement

Market Commentary – January 12, 2026

Last Friday we received the first good look at the job market since the government shutdown with the release of the December jobs data. The data shows the jobs market is soft but not weakening significantly.

The report indicated that fewer jobs were created, but the unemployment rate improved, moving down to 4.4% from the prior report’s 4.6%
figure, which helps to alleviate the Fed’s concern about the state of employment. The Federal Reserve (Fed) is not likely to move interest rates
based on this data release, in our view. The market is expecting additional interest rate cuts but not until later in the year.

We need to remember that Jerome Powell is entering the final stretch of his tenure as Fed Chair, with roughly 100 days remaining. President Trump is likely to name a successor soon, and incoming Chairs typically feel pressure to establish credibility quickly. As a result, economic data will remain important – not just for the markets, but for the Fed as it moves through this transition.

Productivity Shows Sharp Increase

Last week’s third-quarter productivity report showed a sharp increase, climbing to nearly 5%. This reinforces a core element of our investment thesis: that artificial intelligence is beginning to deliver measurable gains in economic efficiency. We continue to believe that productivity will be an important driver for growth in corporate earnings and should also help with trying to temper inflation.